LARGE CAP VALUE

M.D. Sass Investors Services, Inc.

The Saratoga Large Cap Value Portfolio posted negative performance for the fourth quarter of 2018. Negative sentiment was rampant during the period, as many equity markets plunged from their late-September highs. Concerns about weaker consumer spending weighed on several the portfolio’s holdings, as expectations for weaker global demand brings questions about the holdings’ ability to grow earnings. Nevertheless, we continue to expect increasing demand for the brands of the companies in the portfolio. We also saw P/E multiples compress across most of the portfolio.

Equities declined sharply globally during the quarter, with heightened concerns about a significant impending global economic slowdown, tighter central bank policies and trade wars. Financial markets have now priced in a global slowdown. In the absence of an unforeseen recession, valuations for equities suggest to us that this is a cyclical correction which will rebound, rather than a secular bear market. We believe our portfolio is positioned to outperform based on these current dynamics.

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Information contained herein was obtained from recognized statistical services and other sources believed to be reliable and we therefore cannot make any representation as to its completeness or accuracy. Any statements not of a factual nature constitute opinions which are subject to change without notice.